World Economy

FDIs Supporting Philippines Economy

FDIs Supporting Philippines EconomyFDIs Supporting Philippines Economy

The Philippines remains an excellent site for job-generating foreign direct investments, given the country’s highly skilled workforce, competitive labor cost and strong macroeconomic fundamentals.

The government continues to make the business environment more conducive to investors. President Rodrigo Duterte, addressing the business community during the 30th founding anniversary of Toyota Motor Philippines Corp. on August 2, said: “This government will protect you and your investments and will ensure a level-playing field for you to thrive in as long as you obey the laws of the land and safeguard the welfare of your people and the general public,” PNA reported.

Data from the board of investments, one of the government’s tax incentive-giving bodies, show that newly-approved investments surged 165% to P14.5 billion ($270 million)  in the first six months of 2018 from P5.5 billion in the same period in 2017.

Including domestic projects, total investment approvals increased 27% in the six-month period to P238.9 billion from P188 billion a year ago.

Trade Secretary Ramon Lopez said the growth in investment pledges was a concrete proof of the continued confidence of both foreign and local investors in the Philippines. These figures represent the private sector’s investment commitments in the country. Actual FDI flows are even more impressive.

The Bangko Sentral ng Pilipinas reported that FDI net inflows reached $3.2 billion in the first four months of 2018, up by 24.3% from the same period last year. The BSP said such inflows were boosted by continued favorable investor sentiment, solid macroeconomic fundamentals and strong growth prospects.

The BSP now expects FDI inflows to reach $9.2 billion in 2018 amid the sustained positive developments in the domestic economy and with the implementation of various infrastructure projects.

 “FDI uptick is further seen in 2018 in line with the continued fast-tracking and modernization of the country’s soft and hard infrastructure, growing interest from non-traditional investment sources, and improved global perception of the Philippines as an investment destination,” the BSP said.

Foreign direct investments hit record highs in the past two years, reaching $8.28 billion in 2016 before climbing to $10 billion in 2017, as the Philippines was viewed as a favorable investment destination.

Fitch Ratings, one of the three major global debt watchers, said the country’s credit score of ‘BBB’ with a stable outlook remains intact. This score is a notch above the minimum investment grade.

Add new comment

Read our comment policy before posting your viewpoints